LIVE BLOG: Excerpts from the Industrial & Suburban Office Breakout Sessions
Live from the IREJ 2013 Forecast Conference…
The following excerpts are from the Industrial Breakout Session moderated by Dave Liebman of Op2mize, a panel including Mark Moran of NAI Hiffman, Mark Goode of Venture One Real Estate, John Coleman of Newmark Grubb Knight Frank, Lori Tubbs of Commercial Advantage and Douglas Hayes of NelsonHill.
11:50 a.m. — Moran: Surprised by the amount of spec development that came back in 2012. User sales also returned in 2012 and looks to continue into 2013. Although banks aren’t completely back, financing can be had.
11:52 a.m. — Tubbs: Number of rail users touring available buildings and the number of deals completed didn’t add up in 2012, but it’s starting to pick back up again.
11:54 a.m. — Coleman: Land sales returned in 2012 for the first time in years.
11:55 a.m. — Goode: Fiscal cliff turned out to be a non-event. As long as people feel uncertain about the market, good deals will exist.
11:57 a.m. — Hayes: Opportunities are plentiful in the local market. Rail and interstate highways are the reason for Chicago’s success. Lack of education and skilled workers are a challenge going forward. Threats include unemployment, technology taking jobs, uncertainty.
11:59 a.m. — Moran: There will be a disciplined approach to speculative development going forward, not just throwing up new buildings expecting them to be filled. New product will drive up rental rates and add momentum to the market recovery.
12:07 p.m. — Goode: If you own shopping centers, your investment may be at risk. If you own distribution buildings that serve companies like Amazon, you’re in a good place.
12:10 p.m. — Hayes: Rail continues to have a growing impact, especially the intermodal developments. Companies are starting to have dedicated trains brought into these facilities to speed up the delivery process even more.
12:14 p.m. — Moran: Transportation is such a large component of a company’s expenditures, while rent is a much smaller percentage. This combined with driver shortages and speed of delivery suggests rail will continue to expand over the coming years.
12:20 p.m. — Goode: Very few land sites are available in the Chicago market’s “outer crust” for large distribution buildings. If there is no land available a building will not be built. Either the “outer crust” will have to expand, or the the tenant will look to other markets like Indianapolis, where there is more ongoing spec development currently underway.
The following excerpts are from the Suburban Office Breakout Session moderated by Daniela S.A. Fitzgerald, a panel including David Trumpy of GlenStar Properties, Kevin Clinton of CBRE, Mike Rolfs of Hamilton Partners, Jason Simon of Colliers International and Corey Chase of Podolsky Northstar.
11:42 a.m. — Simon: Minimal recovery, positive net absorption in 2012. No new construction is really planned.
11:44 a.m. — Clifton: The story becomes more dramatic when you track A buildings and where they are …there are true A buildings in a true A building location and then everything else. There will be no new construction but we’ll see more build to suit activity over the next few years.
11:47 a.m. — Trumpy: The North Suburban and O’hare submarkets will recover first, East-West is seeing most activity.
11:50 a.m. — Chase: Parking spaces are key on getting leases done in 2013. If a tenant has a few options, they tend to go with the one with the most parking.
11:53 a.m. — Clifton: The big picture of Chicago doesn’t seem optimistic because there aren’t a lot of jobs being created…but every move is happening for a different reason.
11:55 a.m. — Trumpy: A lot of people don’t want to go downtown because it’s expensive and hard to get to. There’s still a lot of companies who don’t want to move downtown, so they settle in the O’Hare market. You get the Chicago address without the hassle.